Biocon

Dear Shareholders,
 
 2009 is a special year as it heralds the advent of our fourth decade as
 a biotechnology pioneer and our second as a bio- pharmaceutical front
 runner. However, for world markets, it has been a year of tremendous
 upheaval, change and challenge.
 
 The global economic downturn has impacted corporate earnings in an
 unprecedented manner over the last fiscal.  This has been further
 compounded by foreign currency volatility followed by a surging US
 Dollar which has led to export driven companies suffering large losses
 on account of foreign ex-change hedging. Biocons financial performance
 has been challenged with all these factors resulting in a sharp decline
 in post tax profits but redeemed by operating profits and margins that
 were sustained across Biocon and its subsidiary companies. Fiscal
 2008-09 will go down as a year of learning and reckoning. This is the
 time to strongly leverage Indias affordability advantage and move up
 the value chain. Now more than ever, the most robust way to grow
 businesses and sustain a competitive edge is through innovation.
 
 I believe innovation empowers us with the flexibility to respond to
 changing situations and provides market leadership through proactive
 processes and products. Thus, in todays challenging environment,
 Biocon is developing new ways of delivering high value at low cost. Our
 partnered services are innovating and augmenting their talent pool to
 build specialized skills that can deliver higher value services in a
 cost-effective manner.  As imitation of products leads to
 commoditization and diminishing returns, innovation holds the key to
 leadership and profitability.
 
 The Innovation Matrix: A Strategic Framework
 
 To navigate the challenges of innovation in the next decade we have
 adopted a well-defined strategic framework that will transform
 scientific discoveries into advances in human healthcare and generate
 incremental value for our shareholders.
 
 Our Innovation Matrix is a four-dimensional endeavour which extends
 into the realms of the known and the unknown.  Creativity in the known
 realm builds on existing knowledge and can result in two types of
 innovation: INCREMENTAL and EVOLUTIONARY. Creativity that challenges
 unknown boundaries and creates new knowledge is EXPERIMENTAL and
 TRANSFORMATIONAL in its impact. A portfolio that covers all four
 spheres enables Biocon to sustain innovation in the short, medium and
 long term.
 
 Our biosimilar insulin, an outcome of incremental innovation, is one of
 the worlds most affordable therapies for insulin dependent diabetes.
 Bio-generic monoclonal antibodies are forming the core of our
 evolutionary innovation strategy. In the more challenging area of
 experimental innovation, Biocon is at the cutting edge. We are
 developing conjugated anti- bodies with a US Biotech start-up, lATRICa,
 to potentially deliver therapeutic cancer vaccines. We are also
 pursuing a path of breakthrough innovation through phase III human
 clinical trials to develop the worlds first Oral Insulin. Biocon is
 thus rapidly moving towards commercializing novel biologies with a
 Made in India label.
 
 Syngene
 
 Over the last 14 years Syngene has grown from strength to strength
 harnessing capabilities and expertise across multiple research areas to
 become Indias leading provider of drug discovery services. Today,
 Syngene offers an integrated discovery platform that opens up avenues
 for collaborative integrated drug development programs and
 partnerships.  Our partnership with Innate to develop type II virulence
 blockers is in its third year and moving ahead with much success. We
 have also entered into an alliance with Sapient Discovery to provide a
 highly integrated platform for structure- based drug discovery. This
 partnership is crucial at a time when cost reductions and efficiency in
 the drug discovery process are driving companies to look for suitable
 outsourcing partners. On another front, we are now alliance partners
 with DuPont Crop Protection, a logical extension of being a service
 provider for over six years. Reporting on our significant partnership
 with Bristol-Myers Squibb, I am happy to announce that the new research
 and development facility dedicated to advancing BMSs research
 endeavours in new drug develop- ment was formally inaugurated on March
 23, 2009.
 
 Clinigene
 
 With India emerging as a credible destination for conducting global
 clinical trials, Clinigene is poised for dynamic growth.  Clinigene has
 demonstrated scientific expertise and operational excellence in
 executing the most challenging clinical studies.  Our comprehensive
 database of healthy volunteers and GCP trained investigators drive high
 volume enrollment in reduced timelines and quality execution of all
 projects. Clinigenes Clinibase®, a database of investigators and
 investigation sites, provides speed and efficiency in clinical trials.
 
 Global Recognition & Awards
 
 I am proud to announce that our first innovative drug, BIOMAb EGFR® was
 voted Asia-Pacific Product of the Year
 
 2008 by Bio-Spectrum, a pan-Asian biotech publication.  Biocon also
 received the BioSingapore Asia-Pacific Biotechnology Award for The
 Best Listed Company of 2009. Confirming our position as an emerging
 global biotechnology player, Med Ad News ranked Biocon as the 20th
 leading biotechnology company in the world and the 7th largest global
 employer in the biotechnology sector.
 
 Increasing Our Global Footprint: AxiCorp & NeoBiocon
 
 It has been a year since the German company, AxiCorp came on board as
 Biocons subsidiary. During this short time, the Company has delivered
 30% top line growth to Biocons consolidated numbers. I am pleased to
 announce that AxiCorp has recently won the German AOK (a leading Public
 Health Insurer) tender for Metformin, which is an important mile- stone
 both in terms of making inroads into the generics market as well as
 laying the foundation for our diabetes franchise in Germany.
 Creditably, in 2008, AxiCorp reached the Top 50 position in the German
 pharmaceutical market and is rated amongst the three fastest growing
 companies in Germany for Q4/2008.
 
 In October 2008, we took a giant step towards consolidating our
 presence in GCC markets. Our JV in Abu Dhabi, NeoBiocon launched
 Abraxane® in the UAE for the treatment of breast cancer. Abraxane® is
 now available as a single-use 100 mg vial (lyophilized powder, to be
 reconstituted for intravenous administration).
 
 Clinical Advisory Board
 
 It has been my constant endeavour to strengthen the leadership of our
 organization by engaging with international experts and consultants. To
 that end, we have recently constituted a Diabetes Clinical Advisory
 Board with the appointments of Prof. Alan D. Cherrington - PhD,
 Professor &
 
 Chairman of Molecular Physiology & Biophysics and Professor of Medicine
 & Diabetes Research Vanderbilt University - Past President of the
 American Diabetes Association; Dr. G. Alexander Fleming - MD, President
 and CEO of Kinexum LLC - Member of numerous Scientific Advisory Boards
 and expert committees; and Dr. Harold E Lebovitz- MD, FACE, Professor
 of Medicine, Endocrinology and Diabetes Division, State University of
 New York, Health Science Center, Brooklyn.
 
 It is envisaged that this Advisory Body will enable us to more
 effectively advance our diabetes pipeline into global, regulated
 markets such as the US and EU. Our Oral Insulin program is also being
 developed with the counsel of this Board. We are in the process of
 setting up similar disease domain specific global advisory boards for
 oncology and autoimmune diseases.
 
 Corporate Social Responsibility
 
 Biocon recognizes its significant responsibilities towards delivering
 better healthcare to the under-served communities of India, especially
 those in Karnataka. One of the most important initiatives undertaken
 this fiscal is the partnered program with the Government of Karnataka
 and The Embassy of Ireland to build 800 toilets for individual
 households in Huskur Gram Panchayat, Anekal. The Micro-Health Insurance
 initiative under the auspices of Arogya Raksha Yojana continues to
 increase enrollments and has expanded its network of clinics and
 hospitals. Biocon Foundation has also partnered the Jain Institute of
 Vascular Sciences in its Mobile Diabetic Foot Clinic which offers free
 detection and counseling services to diabetic patients in rural
 communities.
 
 The People of Biocon
 
 Biocon has exhibited a track record of consistency, perform- ance and
 responsibility. The people of Biocon know that to
 
 continue on this path we must maintain a relentless focus on
 improvement and operational efficiency. We are committed to acquiring
 new skills and new knowledge in order to succeed in the years ahead. At
 its core, this endeavour is designed to unleash the full potential of
 our rich talent pool and focus on delivering good returns on our
 investments.
 
 Looking to the Future
 
 Despite the globally challenging environment we operate in, I believe
 we are beginning to witness the start of a trans- formational phase for
 Biocons various businesses as we strengthen our competitive edge
 through innovation and differentiation. On the manufacturing front, our
 innovation efforts are increasingly directed towards delivering the
 highest quality at the lowest cost. On the services front, Syngene and
 Clinigene aim to compete by augmenting specialized skills to deliver
 increasingly higher value services in a cost effective manner. On the
 research front, we will pursue a strategy that will deliver incremental
 and transformational innovation in an affordable manner. Underlying
 these efforts will be an un- flinching commitment to operational
 excellence which is now a prerequisite for global competitiveness.
 
 I want to take this opportunity to thank the People of Biocon for
 making a difference, both to our Company and those we serve. Thanks to
 their efforts, our growth has accelerated, our research pipeline has
 become stronger and we are rapidly progressing along the path to
 delivering increasing shareholder value.
 
 Yours sincerely,
 
 Kiran 
 May 2009